AFM panel talks Hong Kong

Gov't economic reforms free up productions

The spotlight was on Hong Kong at a Friday AFM panel addressing the city’s co-production boom and its impact on China’s film industry.

Producers made up most of the audience.

Moderated by Variety Asia editor Patrick Frater, the panel “Hong Kong: Your Preferred Destination for Asian Co-production and Gateway to China”  featured Peggy Chiao, producer at Arclight Films; Yu Dong, president-chairman of Beijing Polybona Film Distribution; and Nansun Shi, exec director of Film Workshop.

The Chinese film industry is experiencing “a period of rapid growth,” said Shi, pointing out that China’s box office has grown about 30% every year since 2003, reaching $350 million last year.

This film-biz expansion accelerated four years ago, when the Chinese government started reform and restructuring policies that allowed rise of private sector companies and began to open the market to overseas production companies. And with each year, Shi said, the government is becoming increasingly liberal, economically speaking.

“The government has granted licenses to many more companies, big and small,” he said.

Launched in 2004 by the Chinese government, the Closer Economic Partnership Arrangement (CEPA) has allowed Hong Kong companies a majority ownership in cinemas and has freed up production practices.

For all co-productions during the first year CEPA was in place, “There had to be a 50-50 mix in the key crew and cast, and part of the film had to be shot in China,” Shi said. “But now we only have to use a 30% mainland crew and cast, and the film can be shot anywhere in the world.”

Co-producing a film with a Hong Kong-based company facilitates access into and reach within the Chinese film market, bypassing stricter censorship applying to foreign pics and allowing these films to take a bigger share of the Chinese box office.

For instance, Yu said Universal’s “The Mummy, which was distributed in China as a foreign import, was permitted only 13% rentals, whereas “The Mummy 3,” which is now shooting and is structured as an official co-production, will be treated as a local Chinese film and generate rentals equivalent to 43% of its Chinese B.O.

According to Yu, the Hong Kong government has also boosted the co-prod market by recently investing HK$350 million ($38.7 million) to support the production of films in Hong Kong.

Chiao said “Crouching Tiger, Hidden Dragon” revolutionized the Chinese film industry.

“It set up a mode for co-productions with international financing, with the cross-China talents and then world distribution helped by America’s majors,” Chiao said.

But the presence of America’s major studios in China’s film market has caused some setbacks by discouraging independent moviemaking and original ideas, per Chiao.

“When these American majors started to put money in local productions, it resulted in a dichotomy between so-called big-budget, blockbuster films (and smaller- or medium-budget films),” and that made it more difficult for the latter to survive, Chiao said. “There’s a joke about the Chinese (audience) only watching films made by three directors with the same cast.”

The focus by Hollywood studios on mainstream and commercial products has downgraded the quality of films by limiting genres to periods and action kung-fu and concepts to “good guys vs. bad guys,” Chiao said. “The market has become monotonous, and a lot of people complain about this situation.”

For better or worse, concluded the Taiwanese producer, “China is like a black hole absorbing all kinds of resources.”

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